Latest / Profit With A Plan / EP363 Your Revenue Is Growing. So Why Aren’t You Getting Wealthier?

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EP363 Your Revenue Is Growing. So Why Aren’t You Getting Wealthier? · Profit With A Plan

• 1:09
  Marcia Riner | Profit Booster®: See pricing, scope creep, idle cash, and reactive tax decisions can quietly create a huge gap between how hard you work and how much wealth you're actually building.
• 1:20
  Marcia Riner | Profit Booster®: So if your business looks successful on paper, but doesn't feel that way in your bank account, then this conversation on Profit with a Plan podcast is one you need to hear.
• 1:33
  Marcia Riner | Profit Booster®: Hey entrepreneurs, are you working too hard for too little profit? Well, welcome to Profit with a Plan Podcast, where we help business owners grow smarter, increase profitability, and build a company that's worth more, whether you plan to keep it or sell it.
• 1:47
  Marcia Riner | Profit Booster®: I'm Marcia Riner, Business Growth Strategist and the Profit Booster behind Infinite Profit.
• 1:52
  Marcia Riner | Profit Booster®: Each week, I bring you practical strategies, expert insights, and real-world steps that help you grow revenue, improve margins, and build a stronger business.
• 2:02
  Marcia Riner | Profit Booster®: Today's episode is brought to you by Infinite Profit, where strategy turns into profitable growth.
• 2:08
  Marcia Riner | Profit Booster®: But before we jump in, I have something special for you. If your business is just kind of doing okay, but you know it could be growing faster, producing more profit, go grab your free Profit Booster Growth Map after the show.
• 2:22
  Marcia Riner | Profit Booster®: In just a couple of minutes, you'll uncover exactly what is holding your company back.
• 2:27
  Marcia Riner | Profit Booster®: And where that profit could be slipping away, and even worse, where the best opportunities
• 2:33
  Marcia Riner | Profit Booster®: are, are, to make more business that you've already built. Wow, my mouth is just not working today. So go get your free Profit Booster Growth Map again after the show. It's quick, it's free, and there is no sales call required.
• 2:47
  Marcia Riner | Profit Booster®: So now, let's get into today's conversation so I can stop talking and my guest Natalie can carry on.
• 2:54
  Marcia Riner | Profit Booster®: My guest is Natalie Hoenig. She's a CPA and the owner of Lutz Hoenig CPAs.
• 3:01
  Marcia Riner | Profit Booster®: Natalie works with business owners who are doing all the right things they were told to do to make them successful. They're growing revenues, staying busy, and working hard. But somehow, that success isn't translating into personal wealth that they expected.
• 3:17
  Marcia Riner | Profit Booster®: She helps owners connect the dots between pricing, profitability, cash flow, tax strategy, and personal wealth.
• 3:25
  Marcia Riner | Profit Booster®: So that… so that they can see where their money is really going, and to make those… the… make sure the business is actually rewarding them for the work that they put into it. Natalie, save me! Welcome to Profit with a Plan podcast!
• 3:39
  Hoenig Natalie: Hi, Marcia. Thank you so much for having today. I'm super excited to chat with you.
• 3:44
  Marcia Riner | Profit Booster®: Yes, me too. You know, I mean, some days the mouth just doesn't want to go, and that's one of those days, but, you know, I think the topic is super interesting and poignant on the time of year we are. We're in fall now, and people are thinking, oh…
• 4:01
  Marcia Riner | Profit Booster®: You know, I coulda, shoulda, woulda during the beginning of the year, and now they're going, okay, it's time to get going for the rest of the year, how do I make sure I finish hard?
• 4:10
  Marcia Riner | Profit Booster®: And I think when a business owner looks successful on the outside, you know, maybe they don't feel like it on the inside. What's usually going on with them?
• 4:22
  Hoenig Natalie: Yeah, I mean, we see this with our clients all the time, and I've dealt with it myself personally, to be transparent. I think when we hear fourth quarter push, we're all thinking revenue.
• 4:35
  Hoenig Natalie: Right? How do we get more of that revenue in? But if we instead took a minute, looked at our financials, and looked at our profit, are there year-end decisions we could make to keep more of that money in our own personal bank accounts versus…
• 4:50
  Hoenig Natalie: giving it to employees. Taxes is a huge one, of course, but just looking at all the places where what I call wealth leaks out of your business and doesn't end up in your own personal wealth-building plan.
• 5:05
  Marcia Riner | Profit Booster®: I love it. Yeah, there are so many different areas that just come front of mind, you know, and…
• 5:12
  Marcia Riner | Profit Booster®: you know, it may be something to offset taxes, so let's make a decision, right, at the end of the year, but it always seems rushed, and not planned. So how do we make sure that we're doing that, like, throughout the year, so when we get to that fourth quarter, we're not going.
• 5:26
  Marcia Riner | Profit Booster®: I gotta do something.
• 5:28
  Hoenig Natalie: And just to piggyback off what you're saying, so many of those tax savings opportunities take cash.
• 5:35
  Hoenig Natalie: Right? So if we don't have a bunch of cash available between October 1st and December 31st, it's very easy to miss some of those opportunities. So, I mean, in my opinion, tax planning starts in January for the current year.
• 5:51
  Marcia Riner | Profit Booster®: Good.
• 5:52
  Hoenig Natalie: Right? And we like to lay out the potential opportunities. Now, obviously, in January, we're not going to 100% know where the business is going to end in December, but we like to look at all the opportunities, pick and choose which ones we want to implement now.
• 6:08
  Hoenig Natalie: And revisit that throughout the year, because if the business increases significantly, we gotta adjust that tax plan. If it drops significantly, we gotta… we gotta adjust that tax plan as well, but…
• 6:20
  Hoenig Natalie: it goes a lot along with cash flow planning, right? If we're gonna do these tax saving strategies and we need money.
• 6:28
  Hoenig Natalie: To do them.
• 6:29
  Hoenig Natalie: we gotta plan for that money early in the year, as opposed to right now. Now, not saying you can't do anything right now, you certainly still can.
• 6:38
  Hoenig Natalie: But it does feel rushed, and it feels more stressed, right? Because if I ask you to give me 50 grand today, you're gonna be like, well…
• 6:46
  Hoenig Natalie: I don't have 50 grand.
• 6:48
  Marcia Riner | Profit Booster®: Well, or more, I was thinking of using that for bonuses, or I was thinking, hey, wait, I got payroll coming up, I want to make sure, you know, it's having that comfort area in the… in the account to know that I've got a little bit of slush in there. So yeah, big chunks of money going out to offset a tax.
• 7:08
  Marcia Riner | Profit Booster®: it's still going out, but I think the business owner's like, gee…
• 7:12
  Marcia Riner | Profit Booster®: Do I… do I have it go out in an investment to my company, or do I not make that investment and have it going out? See, both sides are going out, but going out to the IRS, which nobody wants to do.
• 7:24
  Hoenig Natalie: No, and I mean, another thing is a lot of businesses get a little slower in the fourth quarter, right? I mean, I don't really want to work that last week of December, you know?
• 7:36
  Hoenig Natalie: this week, so I think a lot of businesses kind of put the brakes on at the end of December, which even contributes more to the cash flow stress.
• 7:45
  Marcia Riner | Profit Booster®: Exactly. So, so what do you… I mean, is it purely just planning throughout the year that's gonna create that, or…
• 7:53
  Hoenig Natalie: I mean…
• 7:54
  Marcia Riner | Profit Booster®: What are you recommending?
• 7:55
  Hoenig Natalie: planning is a huge key to a lot of things, right? I mean, if there's a huge windfall of cash at some point in the year, that can obviously help a lot, but I think if we wait too long to plan, then we do get in that rushed, kind of.
• 8:11
  Hoenig Natalie: write a quick check mindset, and then it's very easy to think, was that the right decision? And just to go back on having that cash flow kind of saved in the account, that comfort level cash flow.
• 8:23
  Hoenig Natalie: We all love that, as business owners, right? Makes us feel so good, but…
• 8:28
  Hoenig Natalie: Do we really know how much cash we need to run our business every month? How much do we need to get through the end of the year? And how much of that can be used for reinvestment into the business, reinvestment into ourselves, or investment into a tax strategy?
• 8:44
  Marcia Riner | Profit Booster®: Yeah.
• 8:45
  Marcia Riner | Profit Booster®: Well, that's a great point, because I think we like that. I mean, I know so many people that, you know, got burned one time in their life, just one time, right? And now they're a hoarder, right? Because they never want that feeling again. Well, we know that as business owners, we do take a little bit more risks
• 9:03
  Marcia Riner | Profit Booster®: than the normal person, right? And so I think we need to maybe adjust that mindset a little bit and say, okay, where are the risks? And if you're able to forecast where the next job is coming in, or the consistency of the revenue you have coming in, makes it a little easier to go, okay, so if I, you know, reduce that account now.
• 9:27
  Marcia Riner | Profit Booster®: I know that I've got X, Y, and Z coming in in that month, and… or the next month, you know, and I'm gonna be okay.
• 9:34
  Hoenig Natalie: Exactly, yeah, I completely agree. I mean, if your business is burning, I don't know, $100,000 a month, just saying, and you have $500,000 in your bank account, there's probably some room there for you to use that money in a more efficient way.
• 9:49
  Marcia Riner | Profit Booster®: Hmm.
• 9:49
  Hoenig Natalie: It's sitting in your checking account making nothing for you.
• 9:52
  Marcia Riner | Profit Booster®: Right, exactly, exactly. So, knowing that there are opportunities on it, and I know everybody's individual, you know, they have different things, they're in different states, they have different business styles, you know, different objectives, and so on. What are some of the things that you would suggest to do with that cash flow that's sitting there since we're talking about it?
• 10:14
  Hoenig Natalie: Yeah, I mean, there's a lot of ways from a tax perspective and not a tax perspective. I think one thing is anything that is going to continue to grow your business.
• 10:23
  Marcia Riner | Profit Booster®: Hmm.
• 10:24
  Hoenig Natalie: I mean, I'm a CPA, right? So when people come to me, they're very much…
• 10:29
  Hoenig Natalie: of the mindset, how can I reduce my taxes, right? I want to reduce my taxes, but I don't really believe that we should just spend all of our money to reduce taxes.
• 10:38
  Marcia Riner | Profit Booster®: Right.
• 10:39
  Hoenig Natalie: Right? I mean, if we have money, and we have to pay some tax, that's a much better situation than if we have no money.
• 10:46
  Hoenig Natalie: So, I think always, it's about how do you grow your business and set yourself up for the next year? So, if we need to bring on that additional team member, or invest more in marketing, you know, what's that return look like? Because in the end, that's where you're gonna grow the most.
• 11:03
  Hoenig Natalie: Professionally and personally, right? If we have consistent growing business, we have a lot more opportunity in our lives.
• 11:09
  Hoenig Natalie: So I think that's always a good one. Of course, there's some tax savings opportunities, like maxing out retirement accounts right now.
• 11:19
  Hoenig Natalie: Looking at doing a match contribution for your employees or yourself in your retirement accounts.
• 11:26
  Hoenig Natalie: There's some things that we use a lot, there's called a PTE election. You have to be in certain states that have income tax, so most of them do, but you can pay your federal… your state tax through the business for a federal deduction, so that's a great one.
• 11:42
  Hoenig Natalie: you're gonna owe the state tax anyway. And for super high-level income owner,
• 11:48
  Hoenig Natalie: income earners and bigger businesses, we have an amazing charitable contribution strategy that we're deploying here in October.
• 11:58
  Marcia Riner | Profit Booster®: Nice. Yeah. Okay, so there's options, right?
• 12:01
  Marcia Riner | Profit Booster®: individual. It's not just, oh, go buy a new truck, right? Or, you know, do something like that. I mean, that always killed me. Oh, you're at the end of the year, go buy a new truck so you can offset. And I'm like, why? That's not necessarily.
• 12:15
  Hoenig Natalie: Right. If we could take that same 100 grand and put it in something like a retirement account that's going to build for your future, that's always my go-to. Once you spend the $100,000 on the truck, the money's gone.
• 12:27
  Marcia Riner | Profit Booster®: Right. Well, and I liked… and I liked what you thought. You said earlier, too. You said, well, gee, maybe you can invest in a new employee, right? Right. That's an investment that, I mean, exponentially helps the company if done right. You know.
• 12:41
  Hoenig Natalie: Perhaps.
• 12:42
  Marcia Riner | Profit Booster®: And you can invest in some new growth, opportunities for the company. So I like the idea of investing better than just paying some… buying a depreciating asset, right?
• 12:53
  Hoenig Natalie: Exactly.
• 12:53
  Marcia Riner | Profit Booster®: die in the long run, you know?
• 12:56
  Hoenig Natalie: I bought a truck last year, right? Like, do you really need…
• 12:59
  Marcia Riner | Profit Booster®: Right? Exactly, exactly. All right, cool. So let's, let's talk about, some, some of those revenue ideas. So, we know that revenue's going up in our company, right? We're growing, we're feeling good, we're feeling confident. Why doesn't it automatically mean that the owner is building more personal wealth?
• 13:17
  Hoenig Natalie: I mean, I think this goes very much with what you do, but how much profit are we getting out of this revenue, right?
• 13:24
  Hoenig Natalie: I did this in my own business this year.
• 13:26
  Hoenig Natalie: It was a very painful exercise.
• 13:29
  Marcia Riner | Profit Booster®: Bye!
• 13:30
  Hoenig Natalie: But, I literally broke down every single one of my clients, what they pay us per year, what
• 13:37
  Hoenig Natalie: staff time is used, what I pay my team, and what our overhead is, and got an annual profit number. And when I looked at it, some of my favorite clients…
• 13:48
  Hoenig Natalie: We're making us little to no money.
• 13:51
  Marcia Riner | Profit Booster®: Oh my goodness.
• 13:52
  Hoenig Natalie: It was… it was hard to take, but I think, as business owners, we're so focused on the revenue number, and I've been there, right? It's not like…
• 14:01
  Hoenig Natalie: I'm imagining.
• 14:03
  Marcia Riner | Profit Booster®: It feels safe, right? It feels safe. Oh, I have… my dad used to run his business. Oh, I just got paid on this, so that means I have that much money. No.
• 14:12
  Hoenig Natalie: We have a lot of other expenses coming out, out of that, right? And I think it's, you know, when you go to a happy hour, and you're meeting with business owners, what's your business do? And you're like, oh, my business does $2 million, and we're all proud of ourselves, right? But then if somebody looked at our P&L, our profit's $100,000?
• 14:30
  Hoenig Natalie: You're working real hard for that.
• 14:32
  Marcia Riner | Profit Booster®: Nothing.
• 14:33
  Hoenig Natalie: calendars.
• 14:34
  Marcia Riner | Profit Booster®: Exactly.
• 14:35
  Hoenig Natalie: Profitability by service or client or product is a huge one. And then, when we do get that profitability, what are we doing with the money?
• 14:47
  Marcia Riner | Profit Booster®: Yeah.
• 14:48
  Hoenig Natalie: Right? Are we really being intentional about…
• 14:52
  Marcia Riner | Profit Booster®: Excuse me.
• 14:53
  Hoenig Natalie: Bless you. Are we being Be intentional about investing in our future, investing in retirement accounts.
• 14:58
  Hoenig Natalie: And things that are gonna pay us later? Or are we living the good life right now?
• 15:03
  Marcia Riner | Profit Booster®: Yeah, that's… that's a big… that's a big aha, you know? Coming… I'm in Vegas now, but coming out of California, in the Orange County area, you could see, you know, everybody lived on borrowed time, right? You had the big house, you had the watch, you had the wife that was all done up, you know, you had the car…
• 15:20
  Hoenig Natalie: Landra.
• 15:20
  Marcia Riner | Profit Booster®: car.
• 15:21
  Hoenig Natalie: Yeah.
• 15:21
  Marcia Riner | Profit Booster®: Yeah, yeah, so you had all these things that were living large. So yeah, that's, that's a common, common, enjoyment factor that, people spend, you know, what they make, rather than looking at opportunities to invest more. I really like the fact that you said…
• 15:39
  Marcia Riner | Profit Booster®: Hey.
• 15:40
  Marcia Riner | Profit Booster®: Let's look at the actual profit based on the service, the product, you know, the client, and it varies dramatically, because some clients are a lot of extra work, or require stuff, and then when you really run that down, you didn't make much money on it.
• 16:00
  Marcia Riner | Profit Booster®: Is that something that many accountants and CPAs do, or is that something that the business owner needs to ask the accountant and CPA to look at for them?
• 16:09
  Hoenig Natalie: Yeah, I mean, we definitely make our clients look at that, but I don't think it's something… I've never done it traditionally until we transitioned our business, and I've never… I mean, I've never had clients ask me
• 16:24
  Hoenig Natalie: Right? So, I think…
• 16:26
  Marcia Riner | Profit Booster®: This is the big aha, listeners. This is something you need to ask to have done, because, I mean…
• 16:31
  Hoenig Natalie: You get yourself internally, right?
• 16:33
  Marcia Riner | Profit Booster®: Yeah.
• 16:34
  Hoenig Natalie: you can figure it out. It takes work. I mean, my sheet took a long time, but when I saw it, I was shocked that some of the clients I thought, you know, sent us referrals that gave us great reviews, so I'm like, oh, this client's so great, but I'm making $1,000 a year on this client?
• 16:54
  Marcia Riner | Profit Booster®: Yeah…
• 16:55
  Hoenig Natalie: Like, I get that that client's great and loves me, but…
• 16:59
  Hoenig Natalie: How long can I sustain that?
• 17:01
  Marcia Riner | Profit Booster®: Exactly. And I think you need to understand those numbers as an owner, right, as to when you're pricing, because if you're charging them, you know, if you're charging them $3,000 a year, and your net profit's 500 bucks.
• 17:17
  Marcia Riner | Profit Booster®: You know, that's… that's not a… that's not a $3,000 client, that's a $5.
• 17:21
  Hoenig Natalie: Take my hair down.
• 17:22
  Marcia Riner | Profit Booster®: dollar client.
• 17:22
  Hoenig Natalie: How many $500 clients do I have to get to really grow?
• 17:26
  Marcia Riner | Profit Booster®: Exactly, and I think that's the big aha that we often miss.
• 17:31
  Marcia Riner | Profit Booster®: As owners, that we really should take that time to do it. And this is a perfect time of the year to kind of reset.
• 17:38
  Marcia Riner | Profit Booster®: Right. Start planning for next year. What am I going to do? How do I adjust my prices based on the amount of work and scope that I'm doing, right? I didn't realize they were going to be so much more work than actually I priced originally for it. And I think customers understand.
• 17:57
  Marcia Riner | Profit Booster®: Inflation, pricing, you know, you have to adjust for things when they come in, and if they're a heavyweight client or customer, right, then they have to understand that maybe they're going to pay a little bit more because they come in more often and have more… more technical stuff that gets done.
• 18:15
  Marcia Riner | Profit Booster®: And that's different from selling a product or a widget, where it's really easy to go, my widget cost of goods sold is X, and my… my sales price is this, and if I take a discount, this is the percentage that's actually weighing into it, which is one of those things that makes me uncomfortable discounts, but…
• 18:34
  Hoenig Natalie: Right, so I agree.
• 18:35
  Marcia Riner | Profit Booster®: Right? Because there's so much more than you really think it is. And… but those are easier numbers to manage versus labor and, you know, all the employees, and the stuff, and the extra calls, and, oh, I'll just do this for you this time, which becomes, you know…
• 18:53
  Hoenig Natalie: free time.
• 18:54
  Marcia Riner | Profit Booster®: and more and more often. So yeah, it's, it's crazy.
• 18:58
  Hoenig Natalie: Yeah, I completely agree with what you're saying, and I think you're right, it's very common in service businesses, right? Because…
• 19:04
  Hoenig Natalie: Yeah, we might track our time, but, you know, that quick phone call, when they call you, you're not tracking your time on that.
• 19:12
  Marcia Riner | Profit Booster®: Right?
• 19:13
  Hoenig Natalie: And it's… it's not something we're paying… I mean, we're paying our staff for it, but as the business owner, we're not really getting paid on our time, right? We're just… we're just running and working and trying to keep it moving, and I think it's.
• 19:27
  Marcia Riner | Profit Booster®: Whatever trickles to the bottom at the end can go in my pocket.
• 19:29
  Hoenig Natalie: It's very easy to see how much
• 19:33
  Hoenig Natalie: Or to miss how much time we're actually putting in and not getting paid for.
• 19:39
  Marcia Riner | Profit Booster®: Big eye-opener on that. Alright, cool. Yeah, this could be a whole conversation just on that, and the exercises you need to take to do that, and it's not once a year.
• 19:50
  Marcia Riner | Profit Booster®: I mean… It is… I mean, yeah.
• 19:51
  Hoenig Natalie: all the time. And I wanted to say one more thing about figuring out your profitability. Clarity in those numbers gives you so much confidence, right? Because if I'm going to a client and I'm like, hey, Marcia, I have to increase your fee double, triple, you're gonna freak out.
• 20:09
  Hoenig Natalie: And I'm already coming in nervous, but when I see that profitability, I have to think to myself, I cannot sustain this relationship.
• 20:19
  Marcia Riner | Profit Booster®: Yeah.
• 20:19
  Hoenig Natalie: At this price.
• 20:21
  Marcia Riner | Profit Booster®: And I think if you are confident in understanding your data, right, and you put together a sheet, and you say, look, Natalie, this is what I did for you last quarter. This is what I originally thought I was gonna do for you, this is what I actually did for you.
• 20:40
  Marcia Riner | Profit Booster®: And that pricing difference is significant. So, we have two options here. Either I increase my price to cover the amount of service that you truly need, or we cut back on some things. What would you like to do, Mr. Client? You know, Natalie, what would you like to do, right? Given that choice back to the…
• 21:01
  Marcia Riner | Profit Booster®: to the buyer, because then they can come in and say, I really like what we're doing now, it's helping me so much more. Yes, let's continue on that with the new price, right? And… and they may not even realize that they're… what they're… what they're asking you to.
• 21:17
  Hoenig Natalie: I mean, most of the time they don't, right?
• 21:20
  Marcia Riner | Profit Booster®: Right. And the size of the scope change that you did. I mean, when I write my agreements, I always say, well, revisit based on scope, right? What work am I actually doing? And, yeah, there's always that one that says, just do it for me this time. Well, you did it last time. Can you do it again, right? You know, it adds up.
• 21:39
  Hoenig Natalie: I think you're right, and the review that we need to do as business owners
• 21:45
  Hoenig Natalie: I mean, once a year is pushing it, right? Because that scope can creep up so quick in a year.
• 21:53
  Hoenig Natalie: And I like to do it every quarter, which, trust me, is definitely more work, but then I can catch my client too, and it maybe doesn't have to be such a big increase, like, it's not the huge shock of the whole year.
• 22:06
  Hoenig Natalie: It's a little bit each quarter, so I think they digest that a little bit more. And the other thing is, you know, I know we're business people, and by nature, we want to help people, we want to grow, we want people to love us.
• 22:20
  Hoenig Natalie: But sometimes a transition away from us is the best option.
• 22:25
  Marcia Riner | Profit Booster®: I agree. It's always good to, you know, find fresh clients that aren't quite so needy sometimes. But, you know, here's another option, I think, for this, which I really love this part of the conversation, is that when you're doing this analysis, right, and you're finding that, oh, I had to do all this extra work for the client.
• 22:46
  Marcia Riner | Profit Booster®: Well, Could you have done it
• 22:49
  Marcia Riner | Profit Booster®: faster, cheaper, you know, could you… could… could someone else at a lower hourly rate done it better for you? Could you have automated this, or maybe had AI come in and do some of that work for you so that you could still be competitive in your pricing, but yet…
• 23:09
  Marcia Riner | Profit Booster®: transition to the work to somebody who's not, as an example, $500 an hour, right?
• 23:14
  Hoenig Natalie: Right.
• 23:15
  Marcia Riner | Profit Booster®: whatever that number is, into a… maybe it's a $20 an hour employee that's doing that work for you, or, you know, AI, which is $20 a month.
• 23:25
  Hoenig Natalie: Right. I mean, you're hitting on something huge right now, because the fact is, whether you get them to pay the $500 an hour or not.
• 23:34
  Hoenig Natalie: At some point, if you're the one, you're the business owner charging $500 an hour, you're gonna run out of hours.
• 23:40
  Marcia Riner | Profit Booster®: Exactly. There's only so many in the name.
• 23:42
  Hoenig Natalie: You're completely limiting your growth if you cannot push that work onto somebody else, automate it. I mean, you're only one person. You probably should sleep and see your family.
• 23:53
  Marcia Riner | Profit Booster®: But!
• 23:54
  Hoenig Natalie: 24 hours, right? Maybe have fun sometimes, too. So, if you're the one taking on all that work, your client is gonna pay more, and you're limited on how much work you can actually take on.
• 24:07
  Marcia Riner | Profit Booster®: And I think that's the really exciting part about business as it grows.
• 24:12
  Marcia Riner | Profit Booster®: You do have that… that firm, you know, strong metal box that you live in called 24 hours a day. And… and so the only way that you can exponentially grow or scale is to hire…
• 24:27
  Marcia Riner | Profit Booster®: And off, you know, give that… delegate that work to the other people or partners that you have.
• 24:36
  Marcia Riner | Profit Booster®: And I think that that's really how you can multiply and grow and scale. And we're not talking Amazon domination here, we're talking maybe…
• 24:46
  Marcia Riner | Profit Booster®: 3, 5% a quarter, a year, whatever that number is for you, small incremental growth requires that you be able to do more, offer more.
• 24:58
  Marcia Riner | Profit Booster®: But maybe do it better.
• 25:00
  Hoenig Natalie: Exactly, and there is a big school of thought around, you know, maybe there's something that I have to do as the business owner, but I don't like it.
• 25:11
  Hoenig Natalie: Right? And so I'm… let's be real, I'm procrastinating it, I'm not doing the best job, I'm rushing through it because I procrastinated and I need to get it done by tomorrow, but if I brought someone in who loved that work.
• 25:26
  Hoenig Natalie: Gets it done quicker, client is happier, they get a better result, and I'm not doing it?
• 25:33
  Marcia Riner | Profit Booster®: Sign me up!
• 25:34
  Hoenig Natalie: Yes, that's the best case scenario!
• 25:36
  Marcia Riner | Profit Booster®: Yeah!
• 25:37
  Marcia Riner | Profit Booster®: And I think that's… that's where… that's where the business owner, you know, you can't make that decision
• 25:43
  Marcia Riner | Profit Booster®: Without looking at your profitability and the numbers and the actual cost it took you to deliver the product or service that you're selling, right? Or…
• 25:56
  Hoenig Natalie: if you have enough room in that profit to pay someone else, because let's be real, you might charge $100 an hour, but you're not paying yourself $100.
• 26:05
  Hoenig Natalie: Or 500, right?
• 26:06
  Marcia Riner | Profit Booster®: Whatever the number is.
• 26:07
  Hoenig Natalie: And at the end of the day, you're getting, like, $20 an hour.
• 26:09
  Marcia Riner | Profit Booster®: I am bad sometimes, right?
• 26:11
  Hoenig Natalie: Right, exactly. So, you do have to pay that person, probably by the hour or some, you know, salary amount, so you have to build up that profit enough to have room in there.
• 26:23
  Hoenig Natalie: You can't just say, I'm gonna pay someone else, and now I'm gonna lose money on that job.
• 26:28
  Marcia Riner | Profit Booster®: Well, and I think, you know, when I… when I talk about hiring, right, I always look at the opportunity that this person, I'm making an investment in them, and in the short run, it may feel a little uncomfortable and tight financially to bring this person on.
• 26:45
  Marcia Riner | Profit Booster®: But when it's… when they get to their performing level, which should be in, you know, say, maybe, let's call it 2 months or 3 months, right? And they start performing at full capacity.
• 26:56
  Marcia Riner | Profit Booster®: they should be making you money, right? Maybe they're not salespeople, but they're taking something off of your plate so you can go get sales, or they're doing something that supports the company so that others can be more productive. That, to me, is a…
• 27:12
  Marcia Riner | Profit Booster®: they're still making their money, right? They're still doing the work that has the money. It's just that first couple months that feels really, really tight.
• 27:21
  Hoenig Natalie: as long as you're keeping an eye on it, right? Because I think…
• 27:25
  Hoenig Natalie: That is another thing business owners are really good at, is I'll just hire 5 people.
• 27:30
  Marcia Riner | Profit Booster®: I'll definitely.
• 27:30
  Hoenig Natalie: Delegate all this work…
• 27:32
  Hoenig Natalie: Right? But somehow I'm still running around like a crazy person. They're asking me 8 million questions a day, so I'm actually more busy, I'm doing less sales, and so that result is really not coming to fruition. So we can't just, you know, hire someone in, expect the 2-month…
• 27:50
  Hoenig Natalie: financial downturn, and then expect it to take off, right? We have to be really intentional.
• 27:55
  Marcia Riner | Profit Booster®: Yeah, oh, well said, and so important in it. Yeah. Alright, this is a really good part of the conversation, I love this, but what I'd love to figure out next is, you know,
• 28:07
  Marcia Riner | Profit Booster®: Because the business owner is not a financial professional normally, right? They're relying on their team members and their partners to help understand and navigate the financials on it.
• 28:19
  Marcia Riner | Profit Booster®: I think money gets lost somewhere along the way that they don't even know is lost until they're, like, at the end of their quarter going.
• 28:27
  Marcia Riner | Profit Booster®: wait a minute, I thought we made X, how come we only have this left in here? Where are some of the places that money gets lost?
• 28:35
  Hoenig Natalie: I think payroll is a big one, right? When we hire someone.
• 28:39
  Hoenig Natalie: If I'm gonna hire you, Marcia, and I'm saying, I'm gonna pay you $100,000 a year, in my mind, I think $100,000, but that's not what it costs me, right? Probably cost me $120,000 or $30,000.
• 28:52
  Hoenig Natalie: So, really budgeting out payroll and understanding what we're spending on, and people love… business owners love to take care of their employees, and of course, I'm all in favor of that, but usually it comes in the way of benefits that we, the business owner, are paying for.
• 29:09
  Marcia Riner | Profit Booster®: Right.
• 29:09
  Hoenig Natalie: We need to balance that into our budget and make sure we're understanding that.
• 29:14
  Hoenig Natalie: Two, I mean, it depends… it varies widely, right, on the business owner, but I see a lot of money on advertising, so Google Ads, Facebook ads…
• 29:26
  Hoenig Natalie: I mean, we have to advertise if we're gonna keep growing a business, that's just…
• 29:30
  Marcia Riner | Profit Booster®: Absolutely.
• 29:30
  Hoenig Natalie: fact, but are we doing it intentionally again, right? Are we trying those Google ads? Are they working? Are we getting clients in? If we are getting clients, are they paying for the ads? Right. That's a big one. And then, unfortunately, what I see a lot is business owners
• 29:50
  Hoenig Natalie: are funding their personal life with the business. Now, should you fund your personal life with the business? Yes, you're spending hours and hours, but… so you need to get compensated.
• 30:00
  Hoenig Natalie: But how much are we taking out?
• 30:04
  Marcia Riner | Profit Booster®: or accounting for, right? Yeah. So, I think that…
• 30:08
  Hoenig Natalie: Budgeting for?
• 30:09
  Marcia Riner | Profit Booster®: Well, and I think that's the thing. So, if we go back to your example, you're making $100,000, right? But you're funneling your personal life through there, and your kid's cell phone, and your spouse's cell phone, and two cars, and the insurance for everybody, and, you know, the little bits and things here that I can write off the dinner out, and all those things, right?
• 30:31
  Marcia Riner | Profit Booster®: Well, if you don't add that in, then you're thinking, well, gee, do I actually pay myself $100,000, or do I pay myself $80,000 because I had $20,000 worth of expenses in there, or am I actually paying myself $120,000 because I ran $20,000 worth of personal expenses through?
• 30:49
  Marcia Riner | Profit Booster®: Right. What does that kind of number look at that I think, like you said, it's just…
• 30:54
  Marcia Riner | Profit Booster®: It's money getting lost that they're not accounting for.
• 30:57
  Hoenig Natalie: Exactly, and when we, you know, when we all got into business, none of us are like, I want to work for $20 an hour.
• 31:04
  Marcia Riner | Profit Booster®: No.
• 31:05
  Hoenig Natalie: Right? That is not the goal.
• 31:06
  Marcia Riner | Profit Booster®: No.
• 31:07
  Hoenig Natalie: Right? We want to build freedom in more ways than one, but especially financially, and we're running all that stuff through the business, that cash is gone.
• 31:18
  Hoenig Natalie: So it's not coming back into our cash flow, it's not being invested back in the business to grow, and it's not being invested in our own future, so that when we're ready to get out of this business, we're set up, right? That's not what I see. I see so many business owners just relying on that sale number.
• 31:38
  Hoenig Natalie: To get out of the business, and not building up their financial future during the years they're running the business.
• 31:44
  Marcia Riner | Profit Booster®: And I have to say you, that sales number is guaranteed to be wrong, and way off.
• 31:49
  Hoenig Natalie: Half, half.
• 31:51
  Marcia Riner | Profit Booster®: Right? Way, way off.
• 31:53
  Marcia Riner | Profit Booster®: And, you know, so yeah, I think that's something, too, you know, when you look at those hidden expenses, or not recognized in the way… and I know in accounting, they're all recognized, they're all listed, they're all in there, but I mean, in the business owner's eyes, he doesn't count on that.
• 32:08
  Hoenig Natalie: And a lot of times, they're not gonna be on the P&L.
• 32:11
  Marcia Riner | Profit Booster®: Oh, okay.
• 32:12
  Hoenig Natalie: I mean, depending, right? But… so they… they may not… I mean, we run into this with clients all the time. Like, I only have $20,000 in my bank, how can my P&L say I made $100?
• 32:24
  Hoenig Natalie: Right?
• 32:25
  Marcia Riner | Profit Booster®: Exactly.
• 32:25
  Hoenig Natalie: Is that gym membership, for you, is that a deduction?
• 32:29
  Marcia Riner | Profit Booster®: Right, and looking at those kind of things, and… but when you go to sell your company.
• 32:34
  Marcia Riner | Profit Booster®: the… the buyer is gonna look at all that stuff that's going out and going, well, wait a minute, you know, this is not… this is not the best kind of… this is… the numbers aren't making sense, right? They're not looking up. So yes, this is something really important to consider, how much of your personal life to go through, and what is…
• 32:53
  Marcia Riner | Profit Booster®: a good investment for your personal life, and what isn't, and how to balance it out. I mean, it's just…
• 32:58
  Hoenig Natalie: And then we always get, you know, when we get that client worth, your P&L says $100,000, well, you know what you didn't factor in yet?
• 33:08
  Hoenig Natalie: Taxes.
• 33:09
  Marcia Riner | Profit Booster®: Yeah! Right?
• 33:12
  Marcia Riner | Profit Booster®: We know they're gonna be there!
• 33:14
  Hoenig Natalie: Right, we all know we have to file a tax return, right?
• 33:18
  Marcia Riner | Profit Booster®: Exactly.
• 33:19
  Hoenig Natalie: Then there's another 20 grand or something.
• 33:22
  Hoenig Natalie: that you have to pay in cash that you weren't counting on, so it's just that wealth is just leaking and leaking.
• 33:30
  Hoenig Natalie: from your future.
• 33:32
  Marcia Riner | Profit Booster®: Ugh.
• 33:32
  Marcia Riner | Profit Booster®: Gosh. So this is why you want to have a good team on there that understands, not just looking backwards and saying, here's your tax deduction, and looking at the forward opportunities and how to understand a real business and make really good business decisions.
• 33:52
  Marcia Riner | Profit Booster®: So that you have the cash for opportunities, you're pulling the profits in a way that actually
• 34:00
  Marcia Riner | Profit Booster®: Create wealth for you, and that you're also preparing for those expenses that you know are going to come, like taxes, right?
• 34:08
  Hoenig Natalie: Right!
• 34:09
  Marcia Riner | Profit Booster®: I mean, this is… this is really, truly, when you have a partner, a financial partner, like yourself, that's… that's really gonna be the advantage to make sure your business is profitable, because we know, we're busy chasing clients and putting out fires. We don't have time to look at our numbers.
• 34:26
  Hoenig Natalie: We don't. And, I mean, I would argue it's almost like hiring that employee, right? Is that the best use of your time? Looking at your finances, trying to understand them, trying to trace through your bank where the money went, right? Your best…
• 34:42
  Hoenig Natalie: opportunity for growing your business is to sell your business. Not sell it to someone else.
• 34:48
  Marcia Riner | Profit Booster®: sales.
• 34:49
  Hoenig Natalie: To make sales, yeah.
• 34:50
  Marcia Riner | Profit Booster®: To make sales, yes.
• 34:51
  Hoenig Natalie: Make sales, build relationships, right? That's what's gonna get you the growth. It's not gonna be going through every single line item number.
• 35:00
  Marcia Riner | Profit Booster®: Right. Gosh. Okay, so for someone who's listening that's thinking, This sounds like me.
• 35:08
  Marcia Riner | Profit Booster®: This sounds like my business.
• 35:10
  Hoenig Natalie: I would say I've been there.
• 35:12
  Marcia Riner | Profit Booster®: We all have. You're not alone!
• 35:16
  Marcia Riner | Profit Booster®: What's one of the things that they can do this week that they can figure out where their business is truly gonna be profitable and start allowing them to get paid back a little bit more?
• 35:28
  Hoenig Natalie: I mean, I think one is business owners need to look at their financial statements.
• 35:33
  Hoenig Natalie: I can't tell you how many of my clients that we work with, or if I bring in a new client in an initial consultation, and I say, what's your profit?
• 35:44
  Hoenig Natalie: They do not know.
• 35:46
  Marcia Riner | Profit Booster®: Of course not.
• 35:47
  Hoenig Natalie: They know their gross revenue.
• 35:49
  Hoenig Natalie: But they don't know their profit, right? So we need to be more aware of these numbers in general, so looking at your P&Ls at least once a month.
• 35:59
  Hoenig Natalie: Cash flow, planning, and your profit is not the balance in your bank account.
• 36:04
  Marcia Riner | Profit Booster®: Good point.
• 36:04
  Hoenig Natalie: Right? That is… that… that's not what's gonna get you there.
• 36:08
  Hoenig Natalie: And then I'll do my plug, we have an awesome, fun, little business owner scorecard quiz that you can take and see. It'll give you a number of where you're doing things well and where you might need some help.
• 36:23
  Marcia Riner | Profit Booster®: Perfect timing. I was just gonna ask about that, because, you know.
• 36:28
  Marcia Riner | Profit Booster®: They don't know what they're looking at, and when you say financial statements, they're thinking, oh, is it the bank balance? Is it the balance sheet? Is it the P&L? Is it the income statement? Is it the, you know, the.
• 36:39
  Hoenig Natalie: Facture term?
• 36:40
  Marcia Riner | Profit Booster®: There's so many… the tax returns, there's so many different ways to look at your business financially that is not going to give you the answer that you want, right? So we've got to have someone that says, this is what you're going to look at, and this is what it means, right? Exactly. And then once you kind of get that lay of land, then you can go back and go, okay, so last quarter that number said this, this quarter
• 37:05
  Marcia Riner | Profit Booster®: that number says this. What happened differently? What does that mean, right? Exactly. And that's really where I think
• 37:12
  Marcia Riner | Profit Booster®: I understand when it says, look at your financials, right? Rather than just seeing the bottom line, oh, we got this, we got… that must have that in the bank, right?
• 37:21
  Hoenig Natalie: Right. No. Never happens.
• 37:24
  Marcia Riner | Profit Booster®: Whatever happens. So again, that's why it's so important to have a team member, a partner, that can help you navigate that area so that you can make great decisions. 100%.
• 37:35
  Hoenig Natalie: I mean…
• 37:36
  Marcia Riner | Profit Booster®: Marketing and buying the truck at the end of the year.
• 37:38
  Hoenig Natalie: And… and real wealth is not made with one lifetime decision, right? You're not gonna make one decision today, Marcia, and you're gonna be a billionaire. It's just not gonna happen. It's decisions made well, consistently over time.
• 37:54
  Marcia Riner | Profit Booster®: Ugh.
• 37:55
  Hoenig Natalie: That's how wealth I felt.
• 37:57
  Marcia Riner | Profit Booster®: Spot on. Wow. All right, Natalie, this is really good, really juicy. You've given us so many really clear ideas to work with.
• 38:08
  Hoenig Natalie: Great day.
• 38:08
  Marcia Riner | Profit Booster®: can help make the quarter, the last quarter of the year, be really strong and start, God, 2027? You know, really, really well.
• 38:16
  Hoenig Natalie: Right.
• 38:16
  Marcia Riner | Profit Booster®: Where can listeners find out more about you and your company?
• 38:20
  Hoenig Natalie: Yeah, so they can search my name, Natalie Hoenig, on LinkedIn. They can go to our website, LutzHennig.com. Both of those resources will have our quiz posted to it, where you can take that quiz and get some insight as to where you are right now.
• 38:38
  Hoenig Natalie: And then I think you're gonna post the quiz link in the show notes as well.
• 38:42
  Marcia Riner | Profit Booster®: Yeah, absolutely, absolutely. So then, when… when we're doing this quiz.
• 38:50
  Marcia Riner | Profit Booster®: Is it just gonna make me feel like I'm a terrible business person, or is it gonna give me some insights that will help me kind of go, well, I can do this now?
• 38:58
  Hoenig Natalie: It's gonna evaluate you in 5 different areas, so those areas are gonna be things like cash flow, business profit, personal wealth, and it's gonna give you some brief insights. Is it super detailed at this point?
• 39:14
  Hoenig Natalie: No. Do I need to do some work on it? Maybe yes. But I think it does highlight areas that
• 39:21
  Hoenig Natalie: As business owners, we don't always think about first when we're looking at our business.
• 39:29
  Marcia Riner | Profit Booster®: Good point. All right, yeah, no, we can't, you know, it's a free resource, we can't give you everything in the kitchen sink, but if I can get you thinking, and you're gonna get some value out of it, by all means, go onto the site.
• 39:41
  Marcia Riner | Profit Booster®: Download the diagnostic, get the quiz, I mean, figure it all out, and, you know, ask yourself that question. Do I need to focus someplace else right now, right?
• 39:51
  Hoenig Natalie: Not every…
• 39:52
  Marcia Riner | Profit Booster®: My nose.
• 39:52
  Hoenig Natalie: It's the same, right? Like we talked about, business owners struggle with different things.
• 39:57
  Marcia Riner | Profit Booster®: all the time.
• 39:58
  Hoenig Natalie: You know, we… so we can't give a blanket answer of how to fix your business, but we'd love to meet with you and see what we can find out.
• 40:06
  Marcia Riner | Profit Booster®: Perfect. Thanks so much.
• 40:08
  Marcia Riner | Profit Booster®: All right, listeners, thanks for tuning in today. I hope you're walking away with some practical ideas that you can put to work right now in your business to grow a more profitable and valuable business. And I know that looking and reviewing those financials and the pricing and just having the understanding of where that profit is actually.
• 40:28
  Marcia Riner | Profit Booster®: Coming in, I think it'll give you some really good ways of creating a stronger business.
• 40:34
  Marcia Riner | Profit Booster®: Alright, and before we go, now's the time to go grab your free Profit Booster Growth Map. In a couple of minutes, you'll see where your best opportunities for growing revenue and improving profit. You can go get yours at ProfitBooster.biz, and there's no sales call required.
• 40:52
  Marcia Riner | Profit Booster®: And if this episode gave you value, be sure to subscribe and share it with another business owner who needs to hear it. I'll see you next week with more strategies to help you grow smarter and profit stronger. Thanks so much, Natalie.
• 41:05
  Hoenig Natalie: Thank you!